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2021 Cost of Living Adjustments

The Internal Revenue Service has announced the 2021 cost of living adjustments (COLA) to various limits. The adjusted amounts generally apply for plan years beginning in 2021. Some of the adjusted amounts, however, apply to calendar year 2021. Please click for a printer-friendly version of the table below.

Employee Benefit Plans
Plan Year 2021 2020

401(k), 403(b), 457 deferral limit

$19,500

$19,500

Catch-up contribution limit (age 50 or older by end of year)

$6,500

$6,500

Annual compensation limit

$290,000

$285,000

Annual benefits payable under defined benefit plans

$230,000

$230,000

Annual allocations to accounts in defined contribution plans

$58,000
(but not more than 100% of compensation)

$57,000
(but not more than 100% of compensation)

Highly compensated employee Compensation more than $130,000 in 2020 plan year Compensation more than $130,000 in 2019 plan year

          

Health Savings Accounts
Calendar Year 2021 2020
Maximum contribution
  • Family
  • Self
  • $7,200
  • $3,600
  • $7,100
  • $3,550

Catch-up contribution
(participants who are 55 by end of year)

  • $1,000
  • $1,000
Minimum deductible
  • Family
  • Self
  • $2,800
  • $1,400
  • $2,800
  • $1,400
Maximum out-of-pocket
  • Family
  • Self
  • $14,000
  • $7,000
  • $13,800
  • $6,900

                

Social Security
Calendar Year 2021 2020

Taxable wage base

$142,800

$137,700

Maximum earnings without loss of benefits
  • Under full retirement age
  • Year you reach full retirement age
  • $1,580/mo. ($18,960/yr.)
  • $4,210/mo. up to month of full retirement age ($50,520/yr.)
  • $1,520/mo. ($18,240/yr.)
  • $4,050/mo. up to month of full retirement age ($48,600/yr.)

                         

Social Security Retirement Age
Year of Birth Retirement Age
Prior to 1938 Age 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943 - 1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67

                             

© 2020 Varnum LLPNational Law Review, Volume X, Number 302
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About this Author

Kristy L. De Vos, Employee Benefits Paralegal, Varnum,
Paralegal

Kristy focuses her Employee Benefits practice on retirement plans. In addition to drafting plans, she submits plans to IRS for opinion and determination letters, and submits plans to IRS under the Voluntary Compliance Program and to the U.S. Department of Labor under the Voluntary Fiduciary Correction Program.

Her experience also includes drafting plan amendments, consent resolutions, Summary Plan Descriptions, Summaries of Material Modifications, 204(h) Notices, and plan administrative forms. Kristy answers client questions about plan administration and assists...

616-336-6564
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